3. Public rental housing programme

3.1 Short description

Public policies and reforms in the public sector, on the different level of state administration, are predominantly made via a top-down approach, often with political connotations (political will) and with lack of respect for empirical evidence or analyses related to the topic (Bežovan 2008). Over the last 20 years, the practice is that the new governments or the new majors do not respecting the achievements of previous governments3. When they come to office they change professional staff, and they change policy programmes without debates or analysis. In such circumstances, there is “policy with a thousand new starts”, and creative professionals are very often forced to leave offices of public administration and set up civil society organisations to confirm their creativity and innovative skills. Public policies in fact are not places for real innovation, because of cognitive barriers – everything should be written in regulations or in policy programmes, before someone starts with new initiative.

A recent survey4, carried out among relevant stakeholders for local social welfare programmes implementation, stated that officials from public administration fail to understand and trust to the importance of social innovation. Civil society organisations are more aware of the importance of social innovation and they have produced more such projects and ideas. However, public officials are often suspicious of the range and usefulness of such innovations. Thus, it is not easy for civil society organisations to produce visible innovation that may receive the status of good practice in relevant policy area. In addition, the concept of good practice is not recognised as part of the possible policy agenda.

Housing policy, as a space for social innovation, is decentralised, fragmented and left to local politicians’ will. Although the housing crisis is evident in larger urban areas and empirically documented as results of different surveys, vulnerable social groups (young families, single households, internal migrants, elderly, divorced people) are not organised in civil society organisations5. Besides that, there are no advocacy organisations addressing priority of housing needs and the need for affordable rental housing6. Recently, a civic organisation addressing family violence influenced by-law regulation. Victims of family violence are on the priority list for social housing. However, lack of affordable renting housing is ceterum censeo of very rear public debates. The majority of these debates are in different internet forums7.

Publicly debated Strategy of Housing Policy in the City of Zagreb (2006) with well-documented issues of the lack of affordable rental housing for the people from younger generations, with the required level of political will, supported by professionals outside the city administration and capacity of administration in the city were driving forces of this innovation. This social innovation originates from pressing social needs and its potential is in the idea that innovation is implemented and driven by housing needs and recognised by different stakeholders.

Recent housing needs assessment for the city of Zagreb (Bežovan 2012) again stresses the vulnerability of young families and single people. These populations are not eligible to receive housing loans and they are exposed to uncontrolled housing rental, which is marked where they cannot afford decent housing.

Processes of drafting and putting the innovation on the agenda were examples of transparent policymaking processes. A draft of the public rental programme has been presented to the public via a press conference with additional explanation in radio programmes to contact of possible users. Public debate lasted for 15 days and interested citizens were in position to give the comments, to ask questions or to give proposals for improvement of the draft of the programme. All inputs have been analysed and publicly commented on by the policymakers and it gave additional legitimacy to this innovative housing programme. Comments made by the citizens have been built into the final version of the programme, which was framed in a proposal to the City Assembly.

Process of decision making of the programme in City Assembly was followed by lively debate. Representatives of different parties agreed about the importance of the programme, to finally address housing issues, and to meet the needs of young households. Remarks of oppositional party were more formal and directed to some legal issues related to the ownership of flats, which will be distributed in this programme.

3.2 Conceptions and ways of addressing users

This innovation is entitled to young households, age up to 35 years, with more kids who are sub-tenants on the private rental market (that market is mostly not regulated at all) or living together with larger family but in unfavourable housing conditions. In different ways users suffered because of housing conditions. In cases of sub-tenant status, they are in a position to rent small and often poor-quality flats for very high prices. For a flat of 30-40 m2 they pay rent of about 240 euros, whereas via the innovation 240 euros could pay for an 80 m2 flat. As they do not have contracts, they cannot register their permanent residence. Permanent residence is a pre-requisite for obtaining a place in kindergarten. Households with such unstable tenures are at risk of moving and, so, if they cannot find other affordable flats in the neighbourhood, they are forced to change schools. These households are at risk of not being in a position to plan their life. In different aspects mentioned experiences in meeting housing needs made these families a prototype of socially excluded peoples.

Young families living with their parents or with other members of families, often three generations of a family living together and sharing a small flat, are at risks of conflict in such large households. All family members suffer from the lack of space and need for privacy.

Within this innovation, users selected via a public call for application, get a contract for 5 years with the possibility to extend it. They pay less for the rent than on the private rental market and they have very decent, large enough flats in newly built neighbourhoods. In these cases, their quality of life is visibly improved and they are in a position to plan their lives. In meeting the needs of such users, it is visible how housing, as the fundamental determinant of people’s welfare, plays a crucial role in strengthening social integration and social cohesion. Here, decent housing can ensure participation of people in community life.

This type of service is new and bridges the gap between residual social rental housing and the unregulated housing market with the solution to avoid unaffordable flats. This service empowers young families and gives them more opportunities to take active citizenship and to create careers.

This innovation produces different types of tangible services, visibly serving earlier politically unrecognised needs, where, instead of social rights, there are contractual relationships with the potential to develop a new culture of responsible tenants.

3.3. Internal organisation and mode of working

Internal organisation of the innovation is part of the responsibilities in offices of local government and local city companies responsible for managing housing stock. The process of getting tenants in the public rental housing programme is very transparent and all families who are eligible according to mentioned criteria can apply. Tenants make a contract and they make a down payment to guarantee that they will pay rent regularly and keep the flat in good condition. Such down payments, as a pedagogical measure, are a kind of innovation in the local social welfare system8.

One important criterion for applicants to be eligible for this rental programme is that households must give evidence that they have reasonable income per household member. The level of income per household must be at least 30 per cent of the average income in Zagreb. This criterion gives advantage to families where the mother and father are employed and, in fact, guarantees regular payment of rent9.

Here social innovation involves vulnerable social groups. The boundary between “social” and “economic” blurs and learning from this innovation should be crucial for reapplication of the programme to other cities. Empirical evidence on social return: contribution of this innovation to social integration and social cohesion should be the topic of future research10. Also, empirical evidence says that this innovation is sustainable and economically efficient.

There are several reasons to evaluate this innovation and to see ways to improve it.

Lack of coordination between activities of local government offices responsible for making call of applications for this programme and local city companies responsible for managing the housing stock makes this programme less visible to interested public. In such circumstances, marked with political conflicts in the governance of the city, publicity strategies or social marketing of this innovation, unfortunately, are not on the agenda.

3.4 Interaction with the local welfare system

Public rental programme brought a new spirit of local welfare system where officials used to deal only with poor people as a vulnerable population. Here, in this social innovation, there is the sense of a social investment programme with very viable returns in the near future. For the time being, tenants sharing newly build settlements with social renters and homeowners, do not have any form of influence on the programme or participation in its development.

The public rental housing programme is a case of path-breaking in the fragmented housing sector and the new role of local government addressing visible social needs of vulnerable populations. As a visible innovation, this programme has given a new face to the local welfare system and has made them more modern and responsive. Definitely, this project might be a milestone in process of reforming local welfare system and provides more space for social innovation and experimentation.

Also, this innovation put the issues of planning and cooperation of different local stakeholders on the agenda of local social policy.

Besides that, this innovation shows its capacity to become the model for other cities. Mayors and officials of other cities perceive public rental housing as an investment in competent labour force, and with such a programme, they see possibilities to attract young professionals who should be employed in public services (schools, health and social services, police, local administration). The economic crisis has influenced many fiscal capacities of Croatian cities and, for the time being, stopped re-implementation of this innovation in other cities.